GBP/USD: correction is possible

Last week, the GBP/USD pair was falling. On Thursday, the GBP was under significant pressure when the results of the Bank of England meeting were released. UK monetary policy remained unchanged; moreover, given continuing concerns over the global economic slowdown, falling commodity prices, weak GDP figures and low inflation in the UK, interest rates will be raised no sooner than the second half of 2016.

At the same time, strengthening of the USD and growing expectations of a US interest rate hike negatively affect the GBP/USD pair, which, therefore, is likely to continue declining in the medium-term.

Support and resistance

While the price remains below the resistance levels of 1.5455 (EMA200 on the daily chart ), 1.5410 (EMA144), 1.5340 (EMA50 and the upper border of the downward channel on the daily chart ), it tends to decline to 1.5000, 1.4900 (the lower border of the downward channel ) and 1.4600 (2015 lows).
Nevertheless, the price is at the lower border of the downward channel on the weekly chart so, given appropriate indicators signals on the 4-hour chart, it may rebound from this level on Monday and grow to 1.5230 (23.6% Fibonacci) during a short-term upward correction.
On the daily, weekly and monthly charts, OsMA and Stochastic indicators recommend short positions and confirm that the price is likely to continue its downward trend in the medium term.
Support levels: 1.5040, 1.5000, 1.4900.
Resistance levels: 1.5110, 1.5170, 1.5210, 1.5230.

Trading tips

Short positions can be opened from the level of 1.5040 with targets at 1.5010, 1.4980, 1.4910 and stop-loss at 1.5080.
Long positions can be opened from the level of 1.5110 with targets at 1.5190, 1.5230, 1.5290 and stop-loss at 1.5080.

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